Franchise Agreement advice
Discussion
I have a Franchise Agreement to provide services to an associated (parent) company.
My company is profitable and growing.
All of my data, customer and client records are on the parent servers and systems and I use their systems to market and advertise my company, including their www address.
It appears that the parent company is really struggling (cashflow and profit).
My concerns are what happens to my franchise if the parent does go to the wall?
Would I have access rights to my data and to continue to use the parent companies systems and www address?
My company is profitable and growing.
All of my data, customer and client records are on the parent servers and systems and I use their systems to market and advertise my company, including their www address.
It appears that the parent company is really struggling (cashflow and profit).
My concerns are what happens to my franchise if the parent does go to the wall?
Would I have access rights to my data and to continue to use the parent companies systems and www address?
All bank accounts are totally separate and there are no liens over my accounts
The next "Franchise payment" is due to be paid on the 1st June.
There's nothing in the Franchise agreement covers their insolvency, the agreement is all around the level of service that the Franchisee (me) must deliver. WIth regard to customer records there's clauses to say I must use the CRM system to record all contact but not actually my rights over the data.
As for what the Franchisor is telling me; For a few months now he's been trying to see if I wanted to buy into the parent with a view to running it and eventually owning it 100%. I've had niggling doubts in the back of my mind as to whether I would be buying into a castle built on sand and now it appears as though my niggles might be right. The Franchisor has health issues and has said that is why he's wanting out... but last week admitted to me that he had made a cash injection to cover a cashflow issue and now he has dismissed his single employee. The "back office" system we use it open to both of us so looking through his records I can see that his side of the company is not performing well and he has lost money this year.
The next "Franchise payment" is due to be paid on the 1st June.
There's nothing in the Franchise agreement covers their insolvency, the agreement is all around the level of service that the Franchisee (me) must deliver. WIth regard to customer records there's clauses to say I must use the CRM system to record all contact but not actually my rights over the data.
As for what the Franchisor is telling me; For a few months now he's been trying to see if I wanted to buy into the parent with a view to running it and eventually owning it 100%. I've had niggling doubts in the back of my mind as to whether I would be buying into a castle built on sand and now it appears as though my niggles might be right. The Franchisor has health issues and has said that is why he's wanting out... but last week admitted to me that he had made a cash injection to cover a cashflow issue and now he has dismissed his single employee. The "back office" system we use it open to both of us so looking through his records I can see that his side of the company is not performing well and he has lost money this year.
Cheers Tonker
Disaster hat on!!
If I loose their name I'm not totally screwed (albeit I have no web site nor customer management system although I do have all of my emails from the past 2 years and separate databases on my properties)
so those are the 1st areas of action for me!
I already had permission from the Franchisor to have my own site separate from theirs but using their CRM and Back office system to drive it but we always said we needed one for ourselves so it can be tailored to us.
As for "why does he want me in"...... I now suspect that it might just be so he can get his money out.... whilst I understand his model (different from mine) I always had "niggly" doubts about their longevity even though they've been established for 12 years and although he is looking for me to invest he's not exactly been forthcoming with any proper details etc etc.
With their model their cashflow should be ok, so something must be wrong for it not to be which I can't understand without greater digging which given the work I'm going to be doing for disaster prevention I won't have the time to do.
Disaster hat on!!
If I loose their name I'm not totally screwed (albeit I have no web site nor customer management system although I do have all of my emails from the past 2 years and separate databases on my properties)
so those are the 1st areas of action for me!
I already had permission from the Franchisor to have my own site separate from theirs but using their CRM and Back office system to drive it but we always said we needed one for ourselves so it can be tailored to us.
As for "why does he want me in"...... I now suspect that it might just be so he can get his money out.... whilst I understand his model (different from mine) I always had "niggly" doubts about their longevity even though they've been established for 12 years and although he is looking for me to invest he's not exactly been forthcoming with any proper details etc etc.
With their model their cashflow should be ok, so something must be wrong for it not to be which I can't understand without greater digging which given the work I'm going to be doing for disaster prevention I won't have the time to do.
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